CLIENT ALERT: Please read this special message.

Outten Earned $3.4M Fee Award In Gristedes Suit, Court Told

Law360—Ben James

A class of Gristedes workers suing the grocery chain over overtime pay urged the Second Circuit on Tuesday to uphold a $3.4 million attorneys' fee award, arguing that Gristedes' litigation tactics drove up the amount of work that needed to be done.

The plaintiffs said in a brief that U.S. District Judge Paul Crotty was well within the bounds of his discretion when he partially granted Outten & Golden LLP's fee petition and awarded $3.4 million in fees and $442,610 in costs in August, after nearly nine years of litigation.

Outten & Golden did a good job on behalf of the class, obtaining class and collective action certification, getting the court to rule that Gristedes owner John Catsimatidis was individually liable for Gristedes' conduct and ultimately settling for $3.53 million plus injunctive relief, which translated to an average recovery of $11,194 for each of the roughly 300 class members, the brief said.

Catsimatidis, who is running for mayor of New York, has appealed the individual liability finding but the Second Circuit has yet to rule on his challenge.

Gristedes can't show that the lower court abused its discretion, so it's rehashing its claim that the plaintiffs' counsel spent too much time on the suit, the brief said, adding that Judge Crotty previously held that the “vigorous” tactics of Gristedes took away its ability to complain about how much time had to be expended.

“Unfortunately, this appeal is but another example of the type of litigation that drove up fees and extended this litigation over eight years. Throughout its brief, Gristedes makes unsupportable legal arguments and statements that lack record support. It requests reductions to fees that plaintiffs had already voluntarily eliminated and the district court did not award,” the brief said.

          *          *           *

In 2006, the court granted class and collective certification. In 2008, it granted the plaintiffs partial summary judgment on liability, holding that Gristedes failed to pay class members overtime and had retaliated against two plaintiffs by filing frivolous counterclaims, according to Tuesday's brief.

The brief accused Gristedes of frivolous motion practice, violations of discovery rules and orders, and rejecting suggestions to streamline the case. Gristedes repeatedly failed to fulfill its discovery obligations in a timely manner, and defense counsel prolonged depositions with lengthy objections, witness coaching or testifying himself, according to the plaintiffs.

Judge Crotty's close supervision of the case, for over seven years, put him in the best position to evaluate how much time was appropriate for plaintiffs counsel to have spent on the matter, the brief said.

Outten & Golden voluntarily trimmed its fee and cost bids by 25 and 6 percent, respectively, and Judge Crotty then cut the hourly rates for all attorneys and paralegals who worked on the case, according to the plaintiffs.

“At the end of the day, class counsel has expended nearly $2 million more in fees litigating this case than they have been awarded,” the brief said.

Attorneys for the parties declined to comment Wednesday.

The plaintiffs are represented by Matthew Brinckerhoff of Emery Celli Brinckerhoff & Abady LLP and Adam Klein, Justin Swartz and Molly Brooks of Outten & Golden LLP.

Gristedes is represented by Ira N. Glauber, Gregory E. Galterio and Bension D. De Funis of Jaffe & Asher LLP.

The case is Torres v. Gristede's Operating Corp., case number 12-3336, in the U.S. Court of Appeals for the Second Circuit.